Namaste, Sat Sri Akaal, and Salaam. 🫡

Today we’re diving into -
- DLF’s crazy show of confidence in Delhi’s RE market,
- Tata Consumer’s ‘blank check’ plans,
- and Neu looks to get a $1bn hit from foreign investors.

Our read time is 4 minutes and 55 seconds - faster than you can dig into a 3am bhujia-ketchup sandwich…

Let's dive in. 👇

Market Vibe Check

DLF sells out $865mn of luxury homes in 3 days. 🤯

TLDR -
- DLF just sold out 1.1k+ homes in their Privana South development, not too far from Gurgaon.
- Total property value was $865mn, and the average selling price was $800k.
- 25% of homes were bought by NRIs!

India’s largest developer has managed to sell 1,113 luxury homes in 3 days - before they even break ground on them.

The developer is none other than DLF, and the total value of these sales comes to around $865 million - for a value of roughly $800,000 per property.

This is a pretty hefty price, because even if you isolate the penthouses and ‘more luxurious’ apartments, you’re still left with a mean of $560-600k.

The crazier part - DLF intentionally tried to stop their homes from selling out this fast. They limited allotments to one per buyer and raised the home-booking amount to 5x the industry standard, yet the demand side is just so powerful. ¼th of the homes bought were by non-resident Indians too.

India has a seemingly insatiable appetite for all things luxury - with top-end cars, designer clothing brands, and branded real estate all selling like hotcakes.

It’s not only the top-end of the pyramid, but the upper-middle class who’s reaching and buying on debt, fueling a consumption machine that looks eerily similar to the consumerism which has been driving America’s economic engine for so long.

Wow… 🤯

Tata gets ready to pull the trigger on FMCG. 🛒

TLDR -
- Tata’s freshly-merged Consumer arm makes $1.7bn a year and wants to go HAM on acquisitions.
- Their CEO was handed a blank sheet of paper to think of potential targets.
- They’ve got $300mn in dry powder to spend, and will do so very quickly :)

Early last year, Tata decided to pool in all their FMCG resources and bundle the good stuff up into one company to create Tata Consumer.

TC did $1.7bn in revenue last year and was in the headlines briefly when they tried to acquire Haldirams, but got scared away by the $10 billion price tag.

TC is back in the news - but this time, they’re keeping an eye out for any FMCG brand alive. Their CEO literally said that he was given “a blank sheet of paper” to brainstorm acquisition targets this year.

They’re in a desperate attempt to diversify AWAY from their dominant beverages business and enter other global consumer markets - and are hunting for somewhere to plow their $300mn of dry powder.

Tata ideally would love a business that they can plug both internationally and in India - especially something like coffee/tea, which works brilliantly abroad, and is quickly catching on as India’s middle class premiumizes.

One place they’re definitely not entering is the fizzy drinks/potato chips market, because it’s just too easy to become collateral damage while giants like Coca Cola, Pepsi, and FritoLay are fighting.

FMCG is great, because once you tick a few necessary boxes - distribution, relationships, product, branding - there is virtually no universe in which your product ‘flops.’

Amazing momentum. 🚀

Tata hunts for $1bn of cash for their super-app bet. 📱

TLDR -
- Tata is raising $1bn for it’s super-app Neu, right after a $2bn raise earlier this year.
- They did $25m of revenue against $165m of losses last year - spending almost $7 to earn $1.
- They’re making a classic flush-with-cash play: lure users in with incentives, keep them there with convenience.

Even Tata wants to keep up with the Joneses…

Tata Group is raising $1 billion for their super-app Tata Neu.

Super-app businesses (read: Gojek, Uber, Careem) are notoriously cash-hungry, which means that they’re do or die.

Last year, to generate each dollar of revenue from the super-app, Tata had to burn $6.6. This is expensive, but here is some great stuff that comes out of it -

- Tata builds a very sticky customer base. Their repeat order rates are over 60%, which is unheard of in the business.
- A push into financial services. Tata’s created Fintech, Payments, and Stockbroking subsidiaries. They can ship a product to millions “overnight”, and can also tailor products based on customers’ transaction history.
- Commission income. Tata gets a nice slice of all the income they generate for the businesses on their app (BigBasket, 1mg, Croma, etc). Makes for a very good revenue stream that keeps coming back because of how good their ecosystem is.

Last year, while their losses went up 23%, their revenue went up 13X - growth like this is exactly what they’re spending big bucks for.

They’re enjoying a lot of growth on the parent company’s bankroll…

In other news… ☕

IMF drops Argentina a neat little $4.7bn check (FT)

India asks Apple to get rid of Binance and other crypto trading apps (BBG)

Saudi Arabia overtakes the UAE in dollar-amount of VC raised (BBG)

Crypto bros go wild after SEC approves the world’s first spot BTC ETF (FT)

Bankrupt Lordstown Motors gets ordered to pay $45mn (TC)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team C